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Mobile CRM (M-CRM) - Mobile Advertising, Content-Based Advertising, Transaction-Based Advertising, Feedback-Based Advertising

brand branding consumers customers

Mobile CRM means using the mobile channel for customer relationship
marketing or management. A key to any brand building effort is gaining
knowledge of the relationship that exists between the customer and the
brand. Customers have gained more power to choose how they wish to
interact with companies; therefore, new tools for customer
communication are demanded (Newell & Newell Lemon, 2001). Customers
want to be treated individually and receive personalized value.
Marketers need to develop alternative ways of reaching customers with
timely, relevant, and highly personal information of high value, and
they also need to provide customers with a means for timely feedback
(Newell & Newell Lemon, 2001). The mobile phone can be used for
this purpose. If m-CRM is to have an effect on brand loyalty, per se,
marketers need to engage in a dialog with customers and personalize
their brand communication messages. For example, the Belgian home
improvement store, Brico, collects vital information about customers by
inviting “its Discount Club members to join a continued SMS dialogue”
(The Forrester Report, 2001, p. 11). Those who sign in receive
questions on home improvement, and by answering the questions, they
receive discount coupons or invitations to equipment demonstrations. An
eventual goal of m-CRM is to empower customers and let them be in
charge of the brand communication and interaction (Newell & Newell
Lemon, 2001).

Marketers should consider using m-CRM when a highly personalized and
timely dialog with customers is desired and when they want to
differentiate the customer service or product offering with an
innovative method of interaction. Marketers should be cautious,
however, since a long-lasting dialog with customers is challenging to
obtain. It will most likely engage only those customers who are highly
involved in the product or company. Furthermore, marketers should pay
close attention to consumer privacy issues and to handling consumers’
concerns regarding how their personal information is used (Phelps,
Novak & Ferrel, 2000).

Mobile Advertising

Advertising positively affects customers’ purchase frequency, their
behavioral loyalty toward the brand (Jones, 1998), but it also affects
the brand awareness and brand associations (Aaker, 1996; Aaker &
Joachimsthaler, 2000; Keller, 1998). However, companies need to
recognize the fact that the mobile phone is perceived as inherently
personal and that advertising needs to be based only on consumers’
explicit permission to receive commercial messages. For example, in
Finland, the law prohibits all but opt-in mobile marketing.

The content of advertisements can be independent of time and place
or tailored to a specific context. An advantage of the mobile phone is
that it is possible to develop interactive advertisements that cannot
be used in traditional media. A disadvantage is that traditional goals
of advertising, such as creating emotional connections with customers,
cannot be easily transferred to the new medium (Newell & Newell
Lemon, 2001). However, as mobile devices continue to develop, the
possibilities for communicating the emotional dimensions of the brand
will improve. In general, marketers should use mobile advertising to
support traditional advertising media. The mobile phone is a highly
targeting but also supportive channel, which can break through the
clutter created by other media and which can engage consumers into
immediate action.

Based on the literature (e.g., Keskinen, 2001; Ovum Limited, 2001),
mobile advertising can be divided into four different forms: (1)
content, (2) transaction, (3) feedback, and (4) location-based
advertising.

Content-Based Advertising

Content-based advertising means that the advertisement itself
provides content and value to the consumers (Keskinen, 2001), not that
the ad is accompanied by content. An example would be an advertisement
for a restaurant that includes its menus or a cinema advertisement that
includes a detailed listing of films, show times, and film reviews.

Transaction-Based Advertising

In transaction-based advertising, the advertisement is a promotional
offer made by the marketer (Keskinen, 2001), and consumers are
encouraged to respond
directly to the advertisement by buying the product or service or
requesting more information. The format of these advertisements can be push
or pull (Keskinen, 2001). In the push format, the
advertisement is sent to consumers’ end-devices based on permission. In
the pull
format, consumers request the product/service by sending an SMS to a
number that has been advertised in another media, for example, on the
Internet, TV, or at the point-of-sale.

To be effective for various services or products, transaction-based
advertising needs to be combined with mobile payment solutions, giving
consumers the possibility to react immediately by paying for the
product with mobile payment methods. Currently, mobile payment is
underdeveloped, but according to a Finnish report by the Ministry of
Traffic and Communication (2003), it is expected to increase rapidly
from 2004 onward. The report presents statistics by Gartner Research,
which estimates that North America will lag behind Western Europe and
Japan in mobile payment at least until the year 2007. The value of
mobile payment is expected to rise from less than $5 billion in 2003 to
reach $30 billion in both Europe and North America by 2007.

Feedback-Based Advertising

In feedback-based advertising, consumers identify themselves by
sending an SMS to a specified SCN, thereby informing the marketer about
their interest in the product or service (Keskinen, 2001). It differs
from transaction-based advertising in that consumers do not make
purchases directly through the mobile phone. According to The Forrester
Report (2001), it could be a oneoff pull campaign, inviting consumers
to participate via SMS in a promotion by marketing it on product labels
or in radio advertisements. As a practical example, The Forrester
Report (2001) mentions Frito-Lay, which prints codes inside its snack
bags and encourages buyers to participate by sending the given code,
via SMS, to a SCN in order to win a prize. According to The Forrester
Report (2001) this way “Frito-Lay acquires a mobile phone number with
the receipt of each SMS, allowing it to build its own database of
mobile users for future push campaigns” (p. 8). Consumers declare an
interest in the brand and permit the company to engage in dialog with
them.

Feedback-based advertising is perhaps the most commonly used mobile
advertising method. To give another example, the Coca-Cola Company used
feedback-based advertising in its Red Collection campaign in 2001. In
the campaign, Finnish consumers were encouraged to buy Coca-Cola, to
register for the promotion and collect codes that could be redeemed for
points. The<
points
could then be exchanged for branded rewards (e.g., CD holders, sun
glasses, bags, MP3 players). The more points the consumer earned, the
better promotional gifts they could obtain. The possibility of
participating via the mobile phone was communicated through various
channels, such as the Internet, product labels, billboards, TV, and
radio. The case description by Pura (2003) of an advertising campaign
for a Finnish chocolate bar is another example of feedback-based
advertising.

Location-Based Advertising

Location-based advertising is still in its infancy. This is due,
among other things, to the inefficiencies of networks and, in many
countries, a lack of clear laws on when and how consumers can be
targeted with marketing messages related to their location. Therefore,
location-based advertising is currently of minor relevance for
branding, but it may become more important in the future when
technology improves, clear guidelines are established, and the cost of
positioning decreases. Although location-based services exist, there is
a lack of practical examples of location-based advertising. One example
is a location-based service offered by the Swedish-Finnish
telecommunications operator TeliaSonera. Together with a Finnish ski
resort, Levi, TeliaSonera offers their customers the possibility of
opting in (by opt-in consumers give their permission to be positioned)
for a location-based service package, the LevInfo-service, that
provides travelers at the ski resort with information on services and
service providers in the ski resort area. The location-based service
package includes information and advertisements on restaurants, bars,
evening activities, and weather reports. Based on their location,
consumers receive three to four news and commercial messages per day.
The service ends immediately upon leaving the Levi area (or after four
days of the initial service request), but it can also be terminated at
the ski resort by sending an SMS to a specified SCN provided by the
service provider. The service is marketed on the Web, TeliaSonera’s own
mobile portal, and various point-of-sale materials at the resort.

Although location based advertising sounds attractive, there are
challenges that need to be surpassed when large-scale services are
offered. According to Ovum Limited (2001):

The data sharing [costs associated with positioning consumers]
and massive processing power this would require (regularly comparing the
locations
of hundreds of thousands, or even millions of users with hundreds or
thousands of outlets, and combining it with profiled or data privacy
information) have to be weighted against the ease of substitutes–such
as having someone handing out leaflets. (p. 109)

Furthermore, marketers have to be careful not to send too many
messages per day or week, in order to avoid “spamming” or exceeding the
consumer’s tolerance level due to constantly beeping mobile phone
receiving new text messages as the consumer changes locations.

Mobile Portal

A mobile portal is defined by Ovum Limited (2000) as a “wireless
portal [that] concentrates users around communications, content and
other applications that are accessible over a wireless network using a
handheld terminal” (p. 9). The mobile portal can also be described as a
Web site that can be accessed through both fixed line (i.e., the
Internet) and wireless (i.e., mobile devices) connections and which
offers consumers a variety of services, mobile content, and
applications to handheld devices, such as mobile phones and Personal
Digital Assistants (PDAs). According to Aaker and Joachimsthaler
(2000), fixed line Web sites can be a key part of brand-building
efforts due to their ability to convey important information,
communicate experiential associations, influence other brand building
activities, and thereby affect different brand dimensions. Mobile
portals, however, have not been used for brand building. Though several
explanations may be given for this, the foremost is that consumers in
general possess unsophisticated mobile devices that cannot fully
utilize the interactive content of the mobile portal. Mobile portals
have also been described as being ahead of their time. With the spread
of more advanced phones, mobile portals may well increase in
importance, particularly among the young and active phone users.

Wireless or mobile portals should not be elementary versions of
fixed line Web sites. They need to be designed so that the unique
aspects of mobility are realized, such as (1) mobile communication, (2)
expediency–anytime anywhere, (3) real-time interactivity, and (4)
independence of location (Ovum Limited, 2001). Aaker and Joachimsthaler
(2000) offer guidelines for brand-building Web sites that can be
applied also to mobile portals. A brand-building Web site should (1)
generate positive experiences for the consumer, that is,
deliver value and be easy to use, interactive, personalized, and
timely; (2) echo and sustain the brand and its identity; (3) act in
synergy with all other communication channels; and (4) grant access to
the brand’s most loyal customers. In other words, mobile portals, like
brand-building Web sites, should offer a home for the most loyal
customers with strong brand commitment. On the whole, the portal should
reflect and support the brand identity, communicate brand associations
to the potential and existing customers, and give customer a reason for
repeat visits. It needs to be part of an integrated marketing strategy
(i.e., wholly integrated with the Web portal, other communication
channels and materials, and all marketing campaigns).

Although mobile portals have not been widely used for branding, some
advanced examples can be found. One example is the Yahoo! mobile portal
(http://mobile.yahoo.com), which offers a variety of services
and content that the customer is already familiar with from Yahoo!‘s
fixed line Web portal. Thus, the Web and mobile portal give a seamless
appearance and work extremely well together. Consumers are provided
with a way to be attached to Yahoo! as a brand and to its services,
regardless of time and location. After registering their mobile phone
numbers, consumers can, for example, create mobile alerts on different
topics (e.g., breaking news, auctions, sports, e-mail, horoscopes,
stocks, news, and weather), download games to be played both via the
Internet and the mobile phone, and play virtual or fantasy games,
download and upload personal photos, use instant messaging (IM), or
read and write e-mail in real-time. Although it could be argued that
Yahoo!’s mobile portal is just an extension of Yahoo!’s fixed line Web
content, it does show how mobile portal can act in synergy with the
Web. It sustains the Yahoo! brand and encourages interactivity and
personalization. It also provides access for loyal customers
independently of time and place.

Managerial Implications

As can be discerned from the previous discussion and examples,
m-branding is still in its infancy. M-branding has only, to a minor
extent, been used in cross-media advertising to support brand-building
activities. Although m-branding can be used to build and support brand
assets, the differential effect of the mobile channel is difficult to
determine.

Because consumers perceive their mobile phones as inherently
personal, it is important for companies not to clutter it with unwanted
messages that will drive the customer away from the brand. M-branding
of any form should always be based on an opt-in decision by customers.
The brand identity needs to be considered when making a decision on
whether to use the mobile channel or not. Managers need to analyze
whether customers perceive it as a positive experience to interact with
the company and its brands through their mobile phone. Identity mapping
(compare Aaker, 1996, for Brand Identity System), for example, can be
used to evaluate which parts of the identity the mobile phone
corresponds with and whether the target market fits the use of the
channel. When the brand personality is characterized as young,
timeless, and constantly on the move, the mobile phone would be a good
fit. In addition, attention needs to be paid to how the mobile phone
links to other communication channels to form an integrated
communication message. The mobile phone cannot work as a stand-alone in
branding. Without careful considerations of all aspects of the
campaign, m-branding will be only a trial-and-error strategy with
little chance of succeeding.

Since mobile marketing is a relatively new phenomenon, it catches
consumers’ interest and has the ability to effectively increase brand
awareness and create positive associations to a relatively unknown
brand. However, it is important for managers to be aware of the
limitations as well as the opportunities of mobile marketing. For
example, the interactivity that is required from consumers forms a
threshold for participation. Only consumers who feel that it is worth
their while will react, and feedback-based advertising campaigns might
attract prize seekers rather than interested loyal customers.
Furthermore, since m-branding is a new phenomenon, the technique is not
always equal to the promises, and the technical failure of campaigns
cannot be ruled out.

Although brand loyalty and engagement are generally strived for, it
is difficult to discern these results from easily available campaign
statistics. Advertising primarily creates awareness and associations,
rather than brand loyalty, per se. Mobile portals and m-CRM support
loyalty by offering valuable services to the customer, perhaps services
that cannot be obtained by other means. To engage in m-CRM, marketers
need a sufficiently accurate database of consumer information,
including mobile phone numbers and permissions by consumers, to perform
mobile marketing. M-CRM is a relationship supporting service that needs
to be tailored to the customers’ individual needs; they should feel
delighted when they get a brand-related message on their mobile phone.

M-branding Brand Assets Supportive Media
Sponsored Content
  1. Brand Awareness (recall)
  2. Brand Associations
  3. Brand Loyalty
Depending on the sponsor and content, e.g., TV and Radio,
Indoor/Outdoor Billboards, Indoor/Outdoor Events, Product Labels, Point
of Sale, Print Media, Direct Marketing (DM), and the Web.
M-CRM
  1. Brand Loyalty
  2. Brand Associations
DM (e-mail and ordinary mail), the Web, Mobile Portal, and
Personal Selling.
Mobile Advertising
  1. Brand Associations
  2. Brand Awareness (recall, and for Transaction-Based
    Advertising brand recall-boosted brand recognition)
  3. Brand Loyalty
Content-based advertising needs support from highly visible
Printed Media, Billboards, and the Web.
Transaction-based advertising needs support from easily available
printed instructions.
Feedback-based advertising should be well integrated with all the Media
in the campaign.
Location-based advertising is best supported by Local Billboards and
Media, Company Web sites, and Tourist Information.
Mobile Portal
  1. Brand Loyalty
  2. Brand Associations
  3. Brand Awareness (recall)
The Mobile Portal should be advertised in all the Media used
by the company, same as the Company Web site.

The costs of a campaign (direct costs vs. costs incurred from
possible failure) should also be considered. Depending on the methods
used and the comprehensiveness of the m-branding campaign, the incurred
costs are competitive in relation to more traditional branding methods
(i.e., mobile marketing vs. ordinary mail marketing) and, in many
cases, lower. Thus, m-branding provides a cost efficient way of
supplementing other branding activities. Ideally, as marketers get more
experience of m-branding, their mindsets will be altered so that the
mobile channel is incorporated as a permanent part of the company’s
brand building efforts. Table 1 provides a summary of the brand asset
objectives for each m-branding method and of media that might be used
in combination with m-branding.

Future Trends in M-Branding

The worldwide growth of GSM network coverage, upgrades to GPRS
network, the building of third generation (3G) networks, and the
development
of more
advanced mobile services have, taken together, triggered a discussion
of the imminent convergence of the Internet and mobile
telecommunications technologies and their potential commercial use
(Han, Ahn & Skudlark, 2002; Keen & Mackintosh, 2001; Nilsson,
Nuldén & Olsson, 2001). In the future, when mobile
telecommunication and the wired Internet converge, it will offer
marketers new opportunities for utilizing mobile devices in branding.

As mobile devices become more advanced offering better interactivity
features, higher data processing power, faster connections, and better
access to the Internet, marketers will be able to design campaigns that
incorporate voice, moving pictures with color, and interactive
features, such as games and instant messaging. With better user
experiences, it will be easier to catch consumers’ attention and
involve them in the campaign. However, as more companies start to use
the mobile channel, the novelty value for consumers will wear off, and
it will become increasingly difficult to engage them in a brand dialog.
Hence, companies need to improve their ability to segment customers and
to design different branding objectives for different target audiences.
Consumers who are already committed to the brand may need another type
of communicative strategy than the variety seekers or those with a
divided loyalty to several brands.

Further research on m-branding and its advantages and limitations
from both a managerial and consumer perspective is clearly needed.
Interesting research questions would be, for example, (1) Are there
consumer segments that are particularly receptive to m-branding and, if
so, what characterizes them? (2) Are consumers’ emotive reactions
toward a brand affected by m-branding methods? (3) To what extent can
different m-branding methods achieve different brand awareness
objectives (i.e., recall and recognition), either as a stand-alone
media or as an accompaniment to more traditional media? (4) Is
m-branding equally effective for low- and high-involvement products?

Conclusions

This chapter has discussed m-branding as an emerging phenomenon in
brand management and has provided an overview of the m-branding
techniques that are available today. M-branding is assumed to affect
brand equity through brand assets. However, the currently available
techniques have a limited effect on all brand assets and primarily
affect brand associations. Considering the
current shortcomings of both techniques and phones, marketing managers
need to beware of having too high expectations regarding m-branding
effects. Reasons for being cautious include: (1) technology failures
and the high penetration of low-end handsets, (2) the unfriendly user
interface of most mobile phones today, (3) companies’ reluctance to do
a thorough brand identity analysis to assess the suitability of
m-branding, (4) unfamiliarity with different m-branding techniques and
limited knowledge of how the mobile phone relates to other channels of
communication, (5) marketing professionals’ use of the wired Internet
as a benchmark for evaluating the effectiveness of m-branding
techniques, although the two media are completely different, and
finally (6) consumers’ privacy needs and how they are being met in
branding campaigns need to be considered.

The Internet as a marketing medium has received much attention in
both business and research communities, whereas little attention has
been paid to the development of marketing through mobile devices. This
is an omission that needs to be addressed by further research.

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